Happy Monday y’all!
The sunshine sure is pretty streaming in through our windows this morning!
We have made it through 4 of the 9 weeks of Financial Peace University, and this past week was our favorite by far. Not only were we laughing hysterically through the entire video, but it was the most empowering lesson so far. It was all about paying off debts, and truths vs. myths about credit scores, and why we think we need good credit (aka. debt).
There’s a ton of myths that are drilled into us that revolve around credit and the need to have it, and I would encourage you to take daveramsey.com for a spin and look around at various topics on this particular subject.
Thankfully for us, we don’t have an insurmountable amount of credit card debt (Praise you Jesus!) as we have worked hard so this would not be the case. (just saying no to credit card applications and pre-approved non-sense from bank tellers is how we stayed out of this!)
I do, however, have two credit cards, that I used for the “business”. I put it in quotes because one is my Target card, all hail the Target card. I have had it since 2006, and at one point a while back unfortunately funded the business. But sadly, every once in a while I would be so overwhelmed with the “need” to have something that wasn’t business related (a cute dress, new pillows, etc) that it got very close to the limit. It’s no longer so close, but there’s still have a ways to go.
The other one is truly a business card and has less than $800 on it (thankfully!). This will be our first to pay off, cut up, and close. I actually don’t use this card at all, so it just needs to get paid off. Whew!
The rest of our debt is “normal” debt. Cars, our house, and student loans.
For some reason our culture tells us these are “normal” and we will always have certain debts. But that just doesn’t have to be true. And it’s our goal not to be normal.
Dave refers to paying off debts with the “snowball” effect. This means you start with the smallest debt first and pay that off, then go to the next smallest, etc. The snowball gets bigger each time it rolls over. This also creates more and more motivation to cut back on unnecessary things so we can apply every penny to getting all of this taken care of, and live a not so normal life.
The best part of this lesson was our chats together on what could happen. What if we could pay cash for K’s dream car? What could we do if we didn’t have a car payment? What could we do if we didn’t have TWO car payments? What if we could pay cash for land?
The list can go on and on with wonderment of what we could achieve if we just encourage each other and work together.
As I mentioned in Part 1, we are having weekly “committee” meetings. We really enjoy this time together of looking each week at what was spent, what’s coming up, etc. Tonight we will be listing out each debt and begin our plan of action to get our snowball rolling!
Let’s do this!
xoxo, Tamara